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Tuesday, December 4, 2012

Netflix, Inc. (NASDAQ:NFLX) shares fall on competition from Verizon

Netflix, Inc.(NASDAQ:NFLX) is getting more competition
by the day.

First it was Amazon and now it is Verizon
Communications, which has tied up with Coinstar Inc. to provide video streaming
services, called Redbox Instant Service.

A report by GigaOm that the new service will undercut
Netflix's offering results in the share of the company falling about 7 percent
to $76 at close, registering its biggest decline in a month.

According to GigaOM Verizon’s and Coinstar’s Redbox Instant
service could charge subscribers $6 a month for a basic streaming plan. Compare
that with the $7.99 a month charged by Netflix. Online retailer Amazon offers
free two-day shipping and access to 30,000 movies and TV shows for $79 a year.

In fact Redbox Instant, in which Verizon has a stake
of 65 percent will compete with both Netflix and Amazon in the video streaming
segment, where people watch movies and televisions shows online and on mobile
devices such as the Apple's iPhone.

The U.S. market for subscription streaming rose
fivefold to $1.1 billion in the first half of 2012 from a year earlier,
according to data from the Hollywood studio-backed Digital Entertainment Group.

Netflix had 29.4 million streaming customers globally
as of Sept. 30.

Redbox Instant
will offer a la carte movie rentals online and purchases for download, Eric
Bruno, Verizon’s senior vice president of consumer product management, said in
an interview in September. Services will start by the end of the December, this
year.